Insurance vs Warranty: What’s the Difference?

Insurance policy (issued by a licensed insurer)

• Defines coverage, limits, exclusions, and the payment process
• The landlord/operator is the beneficiary for reimbursement/payment under the applicable program documents (where applicable)
• The tenant(s) may sign an indemnity agreement, which can require reimbursement if a payout is made

Warranty-based program (services agreement)

• Provided under a services agreement that includes a warranty
• The warranty does not constitute insurance
• The landlord/operator is the beneficiary of warranty payouts under the services agreement
• Indemnity can still apply to the tenant(s) where an indemnity agreement is part of the program documentation

If you’re unsure what applies to your deal, contact us and we’ll point you to the relevant documents.